A budget line is a straight line designed to show
A. how income is related to hours worked.
B. all combinations of two goods that can be purchased with a given income.
C. the way a homemaker should divide money among several commodities.
D. that if more money is spent on one good, the breadwinner must work all the harder to maintain a satisfactory level of living.
E. preferences for goods and services.
Answer: B
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A fiscal policy action to close a recessionary gap is to:
A. increase taxes. B. decrease the marginal propensity to consume. C. decrease government purchases. D. increase transfer payments.
Unions, by nature, must ____ their membership in order to ____ wages
a. open; lower b. open; raise c. restrict; lower d. restrict; raise
Which of the following is an example of a relationship with a negative slope?
a. spending increases as incomes rise b. more items purchased when prices drop c. more items sold when quality improves d. less items purchased when quality decreases
The poverty rate is the percentage of the population whose family income falls below the poverty line
a. True b. False Indicate whether the statement is true or false